Burning at both ends: how smoking hits health, raises term insurance premium

The Hindu

23-06-2025

American actress and singer Liza Minnelli once quipped, 'Smoking is one of the leading causes of statistics.' As witty as it sounds, the grim truth is hard to ignore, tobacco use remains one of the top causes of preventable death globally.
According to the World Health Organization, it is responsible for more than eight million deaths worldwide each year, including approximately 1.35 million deaths annually in India.
The health consequences of smoking are well documented. From lung cancer and cardiovascular disease to stroke and chronic respiratory issues, tobacco use leads to severe, often irreversible, damage. But what's less discussed is the financial burden it can bring, particularly when it comes to term life insurance.
Why smokers pay more
When you apply for a term insurance plan, one of the first things insurers assess is your smoking status. And the difference in premium can be staggering. For instance, a 35-year-old male living in Delhi could pay as much as 80–100% more for the same term plan if he is a smoker compared with a non-smoker.
For instance, a 35-year-old non-smoker will pay a monthly premium of ₹1,453 for a ₹1 crore term policy, while a smoker will pay about ₹2,905.
That's because smoking significantly reduces life expectancy, increasing the risk for insurers.
Life-threatening issues
Smokers are more prone to a host of life-threatening conditions, including various cancers, heart disease, and chronic respiratory ailments.
This elevated risk translates into higher premiums, as insurers factor in the likelihood of early claims.
Smoking habits outweigh job risk in premium assessment. While your profession also plays a role in determining your insurance premium, smoking is often a more critical factor. For example, a smoker working a low-risk job like a software engineer may still end up paying a higher premium than a non-smoker in a high-risk occupation, such as a construction worker or merchant navy officer. Insurers typically categorise applicants into two groups, smokers and non-smokers, regardless of other lifestyle or occupational risks.
Must buy term plan
There's a common misconception that smokers are ineligible for term insurance. That's simply not true. Smokers are eligible and, in fact, have even more reason to secure financial protection for their families. Given the elevated health risks, buying term insurance ensures that your loved ones are financially safeguarded in your absence.
Honesty matters
Disclose smoking habits upfront. It's crucial to be transparent about your smoking habits while purchasing a term plan. Non-disclosure or misrepresentation can lead to serious consequences.
If an insurer discovers withheld information, often through mandatory medical exams or tests that detect nicotine, the same may lead to claim rejection, cancellation of the policy, or even allegations of insurance fraud.
Frequent evaluation
Insurers don't just ask whether you smoke, they also evaluate how frequently and in what form you consume tobacco, whether it's cigarettes, cigars, or chewing tobacco.
Definitions of 'smoker' also vary across insurance providers. Some classify anyone who has smoked within the last 12 months as a smoker, while others may extend that window to three years.
Try to quit
Also, consider quitting for better rates and better health. If you're considering buying term insurance, quitting smoking can help reduce your premium costs significantly.
Some insurers even offer revised premiums if you quit smoking after purchasing the policy, subject to evidence and re-evaluation over time.
It's an opportune moment to reflect on how quitting smoking can improve not just your health, but also your financial well-being. A single decision, like giving up tobacco, can ripple into long-term benefits for both you and your family.
(The writer is head, term insurance, Policybazaar.com)